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Actually there is no reason to treat short term capital gains as anything other than trading profits since inflation is not a factor. Roe is just muddying the waters when he suggests the change in rates is meant to change behavior. That's not the case; the change is just meant to ensure that trading profits are treated equally, regardless of whether the trade is in goods, services or assets.

Does Cargill, Koch, Albertans, or other large privately-held company make self-driving cars, change the notion of a cell phone into a hand-held supercomputer/video camera, or create a real market for electric cars?

Besides, investors have the option of buying into into private equity funds like Blackstone Group if they want to try out "long term" management.

(I admit that SpaceX is private, but we shall see if they ever make a profit...)

Setting aside short-termism, shouldn't the capital gains rate decrease continually over the holding period anyway just to compensate for inflation?
Say inflation is 2%. If I hold an investment for 1 year, 2% of my gains were from inflation, not any real gain. But if I hold an investment for 10 years, more than 20% of my gains were from inflation, not any real gain.
And in the case of real estate, one may be holding for much longer, eventually want to sell, and find it just makes no sense to sell due to the tax consequences when capital gains don't continually decrease over the holding period.

The real issue causing short termism is that stockholders provide no capital. I am not kidding. Less than 1% of capital on the NYSE comes from stockholders - 99% comes from retained earnings.

So what are stockholders really doing? They are simply gambling but unlike at the casino where the EV is negative, the EV of stocks as a whole is positive.

To fix short termism you need a law change where shares may not be traded aka gambled on the stock exchange but must be redeemed in a determinable way by the companies themselves to release value.

Of course, such suggestions seem like lunacy at first glance, but then compare to the enormous damage that is being done to the economy by short termism (say in the US where general growth is weak) compared to the growth achieved in countries like China where they are forward looking with their 5 year plans etc.

The focus on short term profits has been driven far less by the capital gains tax than it has by two other factors: (1) the trend toward compensating executives with stock options rather than cash; and (2) the Reagan/Bush reductions in the top marginal tax rates.

As a result of those two factors, corporate executives have been given incentives to do whatever they can to push up the price of their employer's stock, even if doing so jeopardizes the long-term profitability of the company, because it allows them to obtain a large reward in the short term that they will be able to keep forever.